EUR/USD Technical Analysis August 2, 2011

The EUR/USD first rose, then fell during the Monday session. The fact that it has broken below the bottoms of two o hammers suggests that some kind of major support in the 1.4250 area might be getting demolished. If we manage to stay under that level – we feel this pair goes down. The pair is in a downward channel, so we sell rallies in general as the world will certainly begin to focus on European debt worries after the debt limit deal is passed in the US.

USD/JPY Technical Analysis August 2, 2011

The USD/JPY pair had an extremely wild day on Monday as traders weigh the results of a possible debt limit deal along with the idea of a possible Bank of Japan intervention in the FX markets. The day had an extremely wide range, but this is what makes the day such a good signal as a move above the highs or lows would be impressive. If we can break the highs from Monday, we would go long. We wouldn’t sell as it is only a matter of time before we see the BoJ get involved.

GBP/USD Technical Analysis August 2, 2011

The GBP/USD pair fell hard on Monday as traders failed to break above the 1.65 level. This area has been identified by us as a potentially major resistance area, and as such – we were ready. The level will continue to hamper rising rates in this pair. A break of the low on Monday gets us short again. A daily close above 1.65 would be impressive, and could get us long.

USD/CHF Technical Analysis August 2, 2011

The USD/CHF pair fell hard on Monday as the US stock exchanges fell. The pair did manage to bounce however, and as such – is forming a candle that looks somewhat like a hammer. This shows that although there is a significant downtrend in play at this point, there may be some support in the 0.77 area. We are waiting to see a bounce in order to sell this pair.

EUR/CHF Technical Analysis August 2, 2011

EUR/CHF absolutely fell apart on Monday as traders piled into the Franc. The pair even came close to challenging the 1.10 mark, which we had suggested it would target recently. (We didn’t however; think that it was going to be in a sudden move like this.) By all measures this pair is oversold – but that hasn’t mattered before, so we are looking for rallies to sell.

AUD/USD Technical Analysis August 2, 2011

The AUD/USD continues to struggle with the idea of the 1.10 handle on Monday, making trading this pair an extremely choppy situation lately. The pair has found support in general, but it simply cannot gain traction at these altitudes. Because of this, we are firm in our commitment to buy the Aussie, but we are waiting to see if there is a pullback first, as we think a retest of 1.08 could be in the cards before it is all said and done.

USD/CAD Technical Analysis August 2, 2011

The USD/CAD had a bullish day on Monday as the oil markets went back and forth. The pair looks like it is trying to bounce, and that would make sense as the market has fallen so hard over the last several months, and the 0.9450 area is such a major area that it was fitting to see another bounce from it. We are presently very neutral when it comes to this pair, but are willing to sell at higher levels such as the 0.98 or parity.

NZD/USD Technical Analysis August 2, 2011

The NZD/USD pair fell on Monday as the world is trying to figure out how to trade around the debt limit situation in America. It should be noted that the stock markets sold off in the US after originally suggesting a gain in the futures markets. Because of this, “risk on” trades like the NZD/USD suffer. We believe it is only a minor setback in the pair, and would be interested in buying, but at lower levels. We are waiting for a cheaper price in which to buy the Kiwi.

USD/CAD Daily Fundamental Analysis for August 02, 2011

The USD/CAD pair rose on Monday as pessimism spread through markets after the ISM manufacturing was released from the United States for July, as the ISM manufacturing slowed to 50.9 well below expectations, which spread concerns among traders over the outlook for growth in the United States, as well as the outlook for growth in Canada, since the United States is Canada’s largest trading partner, and that put huge downside pressures on the CAD, and pushed the USD/CAD pair accordingly to the upside.

The focus in markets will now turn to the outlook for growth, since U.S. lawmakers were able to reach an agreement to raise the debt ceiling, nonetheless, signs that economic growth is slowing in both the United States and Canada should provide the USD with more momentum to rise against the CAD, which means that the USD/CAD pair will probably extend its rise over the coming period.

Tuesday August 02:

The United States will release the income report for the month of June at 12:30 GMT, where personal income is expected to rise by 0.2%, compared with 0.3% in May, while personal spending is expected to rise by 0.2%, compared with the prior flat estimate. Core PCE is expected to rise by 0.2% in June, compared with 0.3% back in May, while compared with a year earlier, Core PCE is expected to rise by 1.4%, compared with 1.2% in the prior estimate.

EUR/CHF Daily Fundamental Analysis for August 02, 2011

Choppy trading prevailed for the EUR/CHF on Monday with the focus still on the debate in the United States and the decision to raise the debt limit which dominated the markets.

The swissy also enjoyed the upper hand as debt woes are returning to haunt the euro gradually, with the slowing pace of recovery and rising uncertainty. The EU and IMF officials started their first review of Portugal’s bailout to assess their commitment to the terms in order to release the second tranche of loans.

We still see that swissy is favored for more gains amid the rising uncertainty and risk aversion, which is supporting haven currencies.  The franc is trading at record highs versus the euro confirming that the debt relief is only temporary as haven demand on swissy remains evident.

On Tuesday, Switzerland will start the week with the annual Retail Sales index for June at 07:15 GMT after it slumped 4.1% in May.

Also at 07:30 GMT from Switzerland the PMI Manufacturing for July is expected with a drop to 52.8 from 53.4.

At 09:00 GMT the euro area June Producer Price Index is due and expected with 0.1% rise on the month following a drop of 0.2% and on the year to ease to 6.0% following 6.2%.

EUR/USD Daily Fundamental Analysis for August 02, 2011

The start of the week was still about the United States and comments from Obama that a deal is reached to raise the debt limit which affected the market and supported the euro versus the dollar which traded with high volatility.

Investors were worried and the focus was on the vote which was expected late Monday, and jitters were evident especially after the vote was delayed a number of times, and also the deadline is on Tuesday so there is no way out for the United States!

The market’s focus on Tuesday will still be about the debt ceiling debate and how rating agencies rate the move. Avoiding default will be supporting to the sentiment yet already have been priced in the market since the start of the week and accordingly the effect is only temporary as the focus returns to the heavy data and the slowing global recovery, especially the slowing U.S. economy.

At 09:00 GMT the euro area June Producer Price Index is due and expected with 0.1% rise on the month following a drop of 0.2% and on the year to ease to 6.0% following 6.2%.

The United States will release the income report for the month of June at 12:30 GMT, where personal income is expected to rise by 0.2%, compared with 0.3% in May, while personal spending is expected to rise by 0.2%, compared with the prior flat estimate. Core PCE is expected to rise by 0.2% in June, compared with 0.3% back in May, while compared with a year earlier, Core PCE is expected to rise by 1.4%, compared with 1.2% in the prior estimate.

GBP/USD Daily Fundamental Analysis for August 2, 2011

On Monday, the pound advanced against the U.S. dollar, following the upbeat sentiment that was fueled with the approval of raising debt ceiling, yet with the release of downbeat manufacturing data and growth forecasts cut to theU.K.economy, the pair moved to the downside.

U.S.officials agreed to increase in debt ceiling by $2.1 trillion in addition to cut in the budget deficit by $2.5 trillion over the coming 10 years. This news boosted demand on high-yielding currencies, yet the pound surrendered gains after the release of data showing thatU.K.manufacturing sector contracted to 49.1 in July relative to the revised 51.4, according to PMI gauge. Also, the sterling continued its drop after the Confederation of British Industry (CBI) lowered 2011 growth forecasts for the British economy to 1.3% expansion compared with the 1.7% growth estimated in May.

On Tuesday, at 08:30 GMT, PMI construction is set to show a drop to 53.2 in July from 53.6 in June, according to PMI gauge. Investors will carefully watch construction data to monitor the status of the sector, especially after the contraction witnessed in manufacturing. 

On the other hand, theU.S.economy will release personal income and spending for June, where the former is predicted to inch down to 0.2% from 0.3% while the later is expected to rise to 0.2% from 0.0%.

USD/CHF Daily Fundamental Analysis for August 2, 2011

On Monday, optimism prevailed in markets after the approval of raising U.S. debt ceiling before an August 2 deadline which prompted investors to sell low-yielding currencies, led by the yen and dollar, where the franc remained solid against majors. Chinese manufacturing boosted hopes after it showed better-than-estimated ease in expansion. On Tuesday, the Swiss economy will release retail sales for the year ending June at 07:15 GMT followed by PMI manufacturing for July, as of 07:30 GMT, which is expected to show an ease in expansion to 52.8 from the previous 53.4 recorded in June. After the slowdown in manufacturing expansion in July in all major economies, the sluggish pace is predicted to take place also in Switzerland, yet the extent of ease of expansion is going to detect the impact on the pair. On the other hand, the U.S. economy will release personal income and spending for June, where the former is predicted to inch down to 0.2% from 0.3% while the later is expected to rise to 0.2% from 0.0%.

USD/JPY Daily Fundamental Analysis for August 02, 2011

The USD/JPY pair advanced with the beginning of the week, as demand retreated on the Japanese yen and low yielding currencies after U.S. President Barack Obama and congressional leaders approved a plan to increase the debt ceiling.

Asian shares and higher yielding currencies advanced on the back of the risk appetite, while the USD/JPY pair could see further consolidation on concerns that the BOJ will interfere in the foreign exchange market after the Japanese currency hit its highest level since March 11 quake.

The Japanese Finance Minister Yoshihiko Noda said last week that the Japanese government and BOJ will take appropriate actions to prevent further gains for the Japanese yen which could hurt exports and corporate profits.

On Tuesday at 01:30 GMT, Japan will release the annual labor cash earning for June, where it had a previous of 1.1%.

At 12:30 GMT, the U.S. economy will release the personal income for June, where it had a previous reading of 0.3% and expected to show a rise of 0.2%. On the other hand, the personal spending for June is expected to come at 0.2% from the prior reading of 0.0%.

The U.S. core PCE is expected to show a rise of 0.2% from the previous 0.3%. However, the annual core PCE is expected to come at 1.4% from the previous 1.2%.

NZD/USD Daily Fundamental Analysis for August 02, 2011

New Zealand dollars advanced as President Barack Obama announced that party leaders have reached an agreement to raise the debt ceiling, spurring demand for higher-yielding assets.

Moreover, the New Zealand dollar also advanced as equity gains boosted demand for commodity currencies, along with the cheerful data from the Chinese economy, where China’ industrial production continued to accelerate, adding that New Zealand products will increase as China is the largest market for New Zealand goods.

At the meantime, the New Zealand economy gives some signs of picking up as retail sales soared during the first quarter, adding that the economic recovery starts to recovery.

On Tuesday the average hourly earnings for the second quarter in New Zealand is due at 22.45 GMT (Monday), while it inclined by 0.3% in the first quarter.

At 12:30 GMT, theU.S.economy will issue the personal income for June, where it had a previous reading of 0.3% and it’s expected to show a rise of 0.2%. On the other hand, the personal spending for June is expected to come at 0.2% from the prior reading of 0.0%.

At 12:30 GMT, the U.S. economy will release the personal income for June, where it had a previous reading of 0.3% and expected to show a rise of 0.2%. On the other hand, the personal spending for June is expected to come at 0.2% from the prior reading of 0.0%.

The U.S. core PCE is expected to show a rise of 0.2% from the previous 0.3%. However, the annual core PCE is expected to come at 1.4% from the previous 1.2%.

AUD/USD Daily Fundamental Analysis for August 02, 2011

The market is currently stabilizing after the US government reached an agreement to raise the nation’s debt ceiling which eased the prevailing jitters over U.S. default and slowing global recovery.

The Australian dollar soared against the most of its major counterparts after China reported that the manufacturing sector continued gathering momentum, adding that Australian exports will rebound. The industrial production expanded by more than anticipations bolstering the case for exports growth.

On Tuesday, the Australian economy has a busy day, where it is going to release many data with a heavy impact on the market movement. At 01:30 GMT the Australian economy will start the day with the house price index for the second quarter after declined 1.7% in the first quarter, and at the same time to release June’s trade balance, whereas the trade surplus reached A$2333 million in May.

Moreover, at 01:30 GMT Australia will release the building approvals index for the month of June, after it dropped 7.9% in May.

The market is waiting the RBA rate decision for August at 04:30 GMT, where the expectations indicated that the Bank will leave the borrowing costs at 4.75%.

At 12:30 GMT, the U.S. economy will release the personal income for June, where it had a previous reading of 0.3% and expected to show a rise of 0.2%. On the other hand, the personal spending for June is expected to come at 0.2% from the prior reading of 0.0%.

The U.S. core PCE is expected to show a rise of 0.2% from the previous 0.3%. However, the annual core PCE is expected to come at 1.4% from the previous 1.2%.

EUR/USD Technical Analysis Aug 1, 2011

The EUR/USD pair fell, and then rose on Friday, as traders really don’t which side of the Atlantic is worse right now. Because of this, the pair will be choppy at best. However, if the markets get a deal out of Congress that it likes in the debt limit discussion, this pair could turn decidedly bearish. We look to sell rallies because we think it is only a matter of time before common sense prevails in DC.

USD/JPY Technical Analysis Aug 1, 2011

The USD/JPY fell apart on Friday as the US GDP numbers came out poorly, and the Congress is still failing to come to any kind of consensus as to what to do about the debt limit talks. The USD is getting punished all over, and this pair is no exception. It should be noted that it is now trading at the same levels that saw intervention previously. With the Bank of Japan increasing the rhetoric, we are still clear of this trade.

GBP/USD Technical Analysis Aug 1, 2011

The GBP/USD pair rose again on Friday as lawmakers in the US simply cannot come to an agreement involving the US debt ceiling and national deficit. The longer this continues, the more likely we are to see weakness in the USD. The UK already has austerity measures in place, and as such….is a safer bet at the moment. The 1.65 did hold, so we think upside gains are limited at this point. Choppy conditions are probably the short-term trading conditions.

USD/CHF Technical Analysis Aug 1, 2011

The USD/CHF pair finally broke through the 0.80 level on Friday, and now begins a new leg down. Because we are in uncharted territory, this pair is likely to have reactions at major round numbers, so expect a slight bounce every one hundred pips or so. The market could also retest the 0.80 level to see if it is now resistance, which would also confirm the next down move.